Editor’s note: This story has been updated after Food Market Hub confirmed, in a press release on Thursday, DealStreetAsia’s report on the company’s fundraising.
Malaysia-based Food Market Hub (FMH) on Thursday announced it has raised $8.5 million in the second tranche of its Series A round from venture capital (VC) investors including AC Ventures Malaysia and returning backers Go-Ventures and SIG.
The startup runs a cloud-based app that enables food and beverage establishments to automatically purchase and track their supplies and inventory. It also provides forecasts for their supply needs.
The latest financing brings FMH’s Series A funding total to $12.5 million.
DealStreetAsia had on Wednesday reported the startup’s plans to raise at least $8.4 million in a Series A1 round from these investors, citing regulatory filings.
The lead investor in the latest tranche is SEA Frontier Fund, which is backed by AC Ventures Malaysia and matched by the Malaysian government via its Dana Penjana Nasional programme.
FMH targets two kinds of customers. About 60% of its 5,000 active users — these are restaurants that have used its app to order supplies in the last 30 days — are paid users, while 40% are free.
Users pay to integrate the FMH app with their accounting and other back-end systems. It also makes money by processing online payments between restaurants and suppliers.
According to FMH’s filings with Singapore’s Accounting and Corporate Regulatory Authority (ACRA), SEA Frontier Fund is investing $4 million in the round.
Go-Ventures, whose anchor investor is Indonesia’s Gojek, and SIG, will contribute $1.7 million and $1 million, respectively. The two investors led FMH’s previous round in 2020.
500 Southeast Asia, hospitality-focused venture capital firm Velocity Ventures, and East Ventures committed $500,000 each, while Capital Code put in $200,000. The investors will pay around $72.68 per share.
In addition, power bank rental service provider MY Rush is subscribing to ordinary shares of the startup worth $100,000.
FMH co-founders Anthony See and Shayna Teh told DealStreetAsia the company is seeking to expand its presence in Indonesia, Singapore and Thailand, apart from deepening its foothold in its home market of Malaysia. The startup is also present in Hong Kong and Taiwan.
See said Indonesia, the largest economy and the most populous country in Southeast Asia, is a key market for the startup. Like Malaysia, the country has many small suppliers and independent restaurants more likely to opt for subscription-based services such as FMH’s than shell out a large sum for automation software.
Though Indonesia is already home to Esensi Solusi Buana (ESB), a restaurant management software provider, See and Teh said they believe ESB’s niche is in its point-of-sale system while FMH focuses on helping restaurants connect with their existing suppliers.
The startup is also planning to expand to Vietnam to offer credit financing to restaurants, particularly new ones that are yet to gain the trust of suppliers. It recently launched payment services in Malaysia, enabling F&B businesses to send invoices and collect payments within its platform.
FMH’s annualised order value for 2021 has grown four times to $600 million from the prior year, See said. The movement restrictions imposed in the wake of the pandemic turned out to be devastating for most F&B business. In its key markets, FMH benefitted from merchants’ desire to cut costs and the availability of downtime to learn and install technology to improve their systems.
The company previously raised $4 million in November last year as part of its first Series A round. Its software is used by well-known brands such as Din Tai Fung and Kentucky Fried Chicken in Malaysia, Singapore, Hong Kong, and Taiwan.
Other startups working on ways to digitalise the food supply chain include Singapore’s TreeDots and Glife, which raised $11 million and $8 million, respectively, in November, as well as Indonesia’s Eden Farm and TaniHub. Eden Farm secured $19 million in November, and TaniHub $65.5 million in May.